Hold Gujarat Fluorochemicals; target of Rs 4548: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • The Fluorochemicals segment is driving revenue growth, with a 135% YoY and 33% QoQ increase, contributing ~34% to total revenue, driven by higher R32 sales and healthy demand across the broader refrigerant portfolio.
  • The Fluoropolymers segment, the largest revenue contributor at ~53%, recorded growth of 22% YoY and 2% QoQ, supported by healthy volumes and an increasing focus on high-value products.
  • Management expects 20% volume growth in Fluoropolymers and multiple PVDF and PTFE grades are at advanced stages of customer qualification for both wet and next-generation dry electrode applications.
  • The Battery Chemicals segment may take longer than expected to make a meaningful contribution to the topline, with only LiPF6 expected to be the key contributor in FY27.

Thesis Validation Checklist

To validate the investment thesis, investors should watch for:

  • Continued growth in the Fluorochemicals segment, driven by R32 sales and demand for refrigerants.
  • Progress in customer qualification for PVDF and PTFE grades in Fluoropolymers.
  • Commercialization of R134a by Q4FY27.
  • Improvement in EBITDA margin, driven by operating leverage and cost discipline.
  • Progress in the Battery Chemicals segment, particularly LiPF6 sales and production scale-up.